What is Stellar Lumens?

Stellar Lumens (XLM)

Stellar lumens (XLM) is an open platform that connects banks payment systems and people. Both domestic banks and universal remittance company have integrated with stellar, so they can move money quickly, reliably, and at almost no cost. A Stellar integration starts with a conversation between XLM’s team and the user. It is committed to more secure payments that users around the globe can use. One unit of XLM is essentially the same as one unit of a dollar, one unit of Euros, or one unit of Bitcoin.

How does it work?

Stellar Lumens work with a public ledger also known as the Blockchain technology. The ledger communicates every 2 to 5 seconds. This is what allows XLM to remain decentralized by people who are using their computers all over the world. According to some crypto experts, soon enough banks will adopt the Blockchain to transfer funds rather than rejecting it.

Stellar Video Explanation

How money moves money in XLM?

Let’s have this example. Ron from the US wants to send $100 to Tobe who is in Nigeria. When Ron sends the 100 bucks to Tobe through a remittance company’s mobile application within fractions of a second, it sends the message to the domestic banks, then the remittance company which is an anchor on the stellar network- this means that it could accept deposits and issue credits on the stellar network deducts the funds from Ron’s individual account.

Those funds are moved over to Universal’s pool account and then moved on to stellar by issuing credits for Ron’s dollar on the network. Once, Universal’s credits are inside stellar. The network searches for the best exchange rate amongst all the market makers on the network. When the exchange is completed, now the Nigerian Naira moved to domestic banks base account. The domestic bank receives digital credits for naira from Stellar Network. A domestic bank credits Tobe’s personal account. That is how a single dollar converts to any 180 currencies on Stellar moves in 5 seconds or less and cost a fraction of fractions of a cent.

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